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AMSTERDAM, May 9 (Reuters) - Novatek OAO, Russia’s second-largest gas company behind Gazprom, is still working on a feasibility study for developing a new liquefied natural gas export plant on Russia’s Gydan Peninsula in the Arctic, Deputy Chairman Mark Gyetvay said.
Speaking at a conference in Amsterdam, Gyetvay said the industry was currently struggling with overcapacity in the short term and he did not believe any major new LNG projects would be undertaken with oil below $40 a barrel.
However, that did not mean the company had given up on looking at Gydan, given the expected growth in the LNG market over the longer term.
“Right now we are just studying the idea about expanding ... we are actually looking at developing a whole new LNG project in the Gydan Peninsula,” he said.
He did not elaborate.
Novatek is currently developing a $27 billion gas production and liquefaction project in the adjacent Yamal peninsula, which is expected to be complete in the second half of 2017.
Last month the Yamal project, which has suffered under U.S. economic sanctions, secured $12 billion in loans from the Export-Import Bank of China and the China Development Bank.
It expects to produce 16.5 million tonnes of LNG annually for world markets.
France’s Total and China’s CNPC hold 20 percent each. And last month Novatek agreed to sell a 9.9 percent stake to the China Silk Road Fund.
The company, co-owned by Gennady Timchenko, an ally of President Vladimir Putin, was placed under U.S. sanctions in 2014. (Reporting by Toby Sterling; editing by Susan Thomas, Greg Mahlich)